Musn’t…Go…There…Must…Resist…

July 22nd, 2011 at 8:16 am

I will fight the forces pulling me back to the debt ceiling/budget debate.  Maybe it’s me, but I can barely even make sense of the articles in this morning’s papers.

Reading today’s articles reminds me of what it was like to read about the stuff we were up to when I was in the White House.  It felt like we were inside the house doing stuff and people—journalists—were looking in through the windows reporting on what we were up to.  But the windows had thick curtains over them so the people on the outside could only see vague images, and their stories were attempts to clarify the images they could barely make out.

Many were good at it, but at least today, it’s hard to patch it together.

Your better bet is to read the always clear and interesting Don Marron on the revenues raised by the GangofSixandtheirBagofTricks.  He explains my least favorite DC phrase: “that depends on which baseline you’re using.”  Yikes!!

I pledge to never raise taxes blog about real developments as they become clear to me.

 

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7 comments in reply to "Musn’t…Go…There…Must…Resist…"

  1. foosion says:

    My perception is that the stories originate from people leaking things for tactical reasons, such as gauging support, inciting opposition, etc.


    • Maggy says:

      Also “leaks” are initiated/conjured up by media types looking for eye balls.
      rage and pearl clutching sells I guess. It all about the money baby.


  2. Mary says:

    I am not trying to cast blame, but I was deeply resentful of the tax cut extension. Those negotiations were absolutely ridiculous, and almost every major economist supported them. I went against practically the entire establishment with my main compliant being that they were under-estimating layoffs at the state and local levels (which has turned out to be the case), and on principle, I opposed the cuts for the rich. I refused to compromise on it, no matter what. And if people would not have compromised then, we would not be here now. (You don’t give your opposition the one thing they want…. I could explain why this is so, but it would take too long.) Ezra (who I like; he just happened to make a bad call on this one) came out and said that the President has proven himself to be a tough negotiator in these sort of backroom deals.

    Now, why I’m pointing this out is not to make anyone feel bad (we all make mistakes including myself), but because, in retrospect, it’s clear that these calls weren’t right. The President is not a tough negotiator, and he needs to understand that it is a huge weakness for him. It’s also proving to be very costly for the country. He’s not a terrible politician. He has several skills. He’s great at oratory. Negotiating is just not one of them.

    The President said he reads Lincoln, but there are a lot of other politicians he can read. I recommend that he start with Julius Caesar or Caesar Augustus. Politics is not just about compromise. In fact, it should play a relatively minor role. It’s about cunning and cleverness. It’s about getting your way: whether that’s about winning hearts and minds, timing, forcefulness, standing your ground, playing good cop, bad cop, negotiating in backroom deals, taking your case to the public, whatever. There are a thousand and one different tools. Compromise is only one of them, but for Obama, it seems to be the only one.

    There are two kinds of people in politics:
    There are the jerks that are really about themselves.
    There are the people who have to maneuver around the jerks to do good things for the country.

    Clinton falls into the latter category. I understand Bill Clinton. We had similar childhoods, complicated and difficult, and we had to learn how to deal with complex adults and adult situations when we were still kids. This makes you naturally good at politics. This was not Obama’s upbringing so he still needs to learn it. When Clinton says do something. Obama needs to listen to that advice. He needs to take the advice of people who are better at this than him. Instead, Obama has been insisting that the party follow his approach because he thinks it’s the “higher ground.” This is losing strategy. He needs to get this through his obstinate head. Obama is not wired for this; he should NEVER have closed door negotiations. Get him out of there.

    I will say it again. It’s really not the worst thing in the world if he can’t run again right away. He’s a relatively young man. He has a beautiful family. He can spend more time with them, especially while his kids are young, and also, maybe his hair will stop going grey. It’s a stressful job. He can view it as an extended vacation. He himself has said he would be OK if he didn’t win reelection. All he has to do is what I suggested below. Raise the debt ceiling unilaterally and take any political fallout.

    I don’t often panic to this degree, but I have a really bad feeling….


  3. John says:

    You’re an economist… You can’t help yourself. Sigh. 8^)

    “… Lead us not into temptation, but deliver us from evil …”


  4. Alessandro Rosa says:

    Dear Dr. Bernstein,

    In theory all citizens have access to their representatives and their President, but in practice it is very unlikely any average person’s voice is heard, so a forum like this is one of the few places where someone may actually get the ear of someone who has the ear of the decision makers.

    I read the discussion in yesterday’s NY Times regarding Presidents and the deficit and that discussion generated an idea that could possibly be politically viable as a means of ending this budget impasse.

    In times of war, Presidents have gone to the American public and asked them to sacrifice for the cause, be it war bonds or rationing or victory gardens and while those ideas from the past were embraced, no one has asked the American public to support this, our longest war in that way.

    So my proposal is this. Congress authorizes the Treasury Department to issue a War Bond offering for the amount of the National Debt attributable to the Wars on Terror. This issuance would be taken “Off the Books” and as law would authorize that the amount not be applied to the Federal Debt limits which are statutorily imposed. The amount of that issuance would then be used to pay down the current general Federal Debt Limit, there by significantly reducing the amount of debt applied towards the debt limit, thus making the requirement for raising the debt ceiling at this time moot. The bill would add a war surcharge to the tax code which would be used for the sole purpose of paying down the War Bond and would be phased out once the War Bond was paid off in its entirety. The law could also require the state department to open negotiations with our international allies to shoulder some of the costs associated with the wars on terror and any funds that were negotiated would be applied to reducing the war bond issuance and accelerating the phase-out of the surcharge.

    This would be a win / win for all sides. Republicans could go back to their constituents and say that they were amending the errors that were made by not funding the war on terror during the time of its execution and adding those costs to the national debt and wrap that in a patriotic banner of preserving our National Security and not transferring our costs on to the future generations by keeping the debt ceiling fixed and that the surcharge was just an example of the sacrifices that real Americans have historically made to keep this country safe. Democrats could make the same argument that the deal corrects the accounting smoke and mirrors of the Bush Administration with regards to the war while not completely tying their hands to all of the draconian cuts that are being required in order to avert a default crisis.

    Yes we need to address the deficit and wasteful spending and there should be cuts as well as revenue increases, but that may be a fight best left for a less polarized congress.


  5. ljm says:

    James Kwak at Baseline Scenario makes the point that the Bush tax cuts cost us $3-4 trillion over 10 years, so ending them would get us $3-4 trillion. Just let them expire. They don’t have to tinker with social security. They can actually take the time to do something meaningful with the high cost of healthcare.


  6. Joel Wendland says:

    I have had the same experience. My big question is once a deal is reached how much posturing and fighting is going to occur over the specifics of the cuts and the tax reform and the Medicare and Social Security changes?


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